Clause 60
Energy Bill
6:15 pm
Malcolm Wicks (Minister of State (Energy), Department for Business, Enterprise & Regulatory Reform; Croydon North, Labour)
This clause will ensure that an operator can be held to any obligations under a programme, even when the original operator ceases to hold a nuclear site licence in relation to the site. This approach reflects the policy on the decommissioning of oil and gas installations under the Petroleum Act 1998, whereby the Secretary of State can pursue the licensee in relation to its obligations under an abandonment programme. The operator would only be released from its obligations when given notice by the Secretary of State. The notice may release the operator from all or only specific obligations, and it may relate to all or a specific part of the site, or to all the nuclear installations on-site or to one specified in the notice. It may also be unconditional or subject to conditions.
Where an operator wishes to relinquish ownership of a station, for example, the clause will enable the Secretary of State to require the outgoing operator to take the necessary action to ensure that the programme is up to date before releasing it from any obligation under the programme. The Secretary of State could, for example, require the existing operator to make good any shortfall in the programme, such as a funding deficit or a failure to complete the building of certain waste facilities by a certain date.
Additionally, the original operator might well wish to sell the station to another entity that does not have the necessary financial security arrangements in place and for which, if it had applied to have a programme approved, the Secretary of State would not have granted approval or would have put certain conditions in place. Using the clause, the Secretary of State could hold the original operator to certain obligations under the programme until such time as the new operator can make provision for that security.
The clause will therefore provide an important protection to ensure that recourse to public funds is remote at all times, by ensuring that the current or previous operator meets the full decommissioning costs and its full share of waste management costs. The Secretary of State’s powers to approve a programme submitted by a new operator will enable the Secretary of State to distribute responsibility for such action between the old and the new operator, as he considers appropriate.
We have underlined in the draft guidance the importance of the operator informing the Secretary of State of an impending change to the identity of the licensee—through a merger or acquisition, for example. However, the fact that consent will be needed to release the operator, in line with the clause, should encourage the relevant persons to inform the Secretary of State of the change as early as possible.
There is an argument that the clause could engage with article 1 of the first protocol of the European convention on human rights, which deals with the protection of property: although the licence, not ownership, can pass from one operator to another, the Secretary of State could, by using the clause, require the original operator to continue to make further payment to the fund. However, the Government do not believe that the clause engages with article 1. It is perfectly acceptable that such payment should be made, and that can be justified, because it is the Government’s stated policy that operators should be responsible for the decommissioning and clean-up of the station and that such payments should not come from public funds. Alternatively, it is a control-of-use provision.